BUSINESS

11.30.11

Was Facebook Forced to Go Public?

Nicholas Kamm / AFP / Getty Images

Why is Facebook going public in a weak economy? It may not have a choice. According to The New York Times, the company has been handing out so many shares that federal regulations are kicking in. The law says companies with more than 500 shareholders must file reports, including financial audits, to the SEC. Facebook likely passed that mark this year, thanks to two events: longtime employees exercising their options and selling their shares to private investors; and the $1.5 billion in shares the company sold to private investors through Goldman Sachs. Facebook will be required to begin disclosing the new information by April 2012.